A Quogue resident and owner of a local bus company pleaded guilty in federal court last week to federal fraud and conspiracy charges related to a years-long “check kiting” scheme that prosecutors say defrauded two banks out of some $9.6 million.
According to U.S. Attorney Breon Peace’s office, John B. Mensch, 54, was the owner of East End Bus Lines and admitted to employing a scheme to write checks from the company’s overdrawn accounts at one bank to the company’s account at another bank, where the money was withdrawn before the check was bounced back by the first bank.
The scheme allowed Mensch to keep the bus business running for nearly 18 months until the scheme was uncovered in September 2018. The company filed for bankruptcy that same month.
“Rather than take lawful steps to wind down his failing businesses, John Mensch resorted to criminality, operating a scheme to defraud two banks into advancing him millions of dollars that neither Mensch nor his company ever had, or had any realistic expectation of obtaining,” Peace said in a statement from his office on October 2, the day Mensch pleaded guilty in a federal court in Central Islip. “Mensch’s fraud resulted in the banks unwittingly subsidizing several months of his financial mismanagement.”
The banks have not been identified.
Mensch faces up to five years in prison for the scheme. He will be sentenced early next year.
Staff Writer on Oct 9, 2024